Market Update 9/21/26

By Daniel Poppe

Market snapshot

•  Stocks: U.S. stocks were mostly lower last week. The Dow Jones Industrial Average fell 1.65%, the Russell 2000 Index declined 1.47%, and the S&P 500 Index slipped 0.06%. The NASDAQ Composite gained 0.73%.

•  Bonds: The 10-year Treasury yield rose from 4.96% to 5.01% last week.

•  Gold: Spot gold rose 0.68% last week, closing above $4,300 an ounce.

•  Market indicators and outlook: FPI’s market regime indicators show the market is in a Normal economic environment stage, which is historically positive for stocks, bonds, and gold but with a substantial risk of a downturn for gold. Normal is one of the best stages for stocks, with limited downside. Volatility is Low and Falling, which favors stocks over gold and then bonds.

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For the latest information on our Quantified Funds, check out our weekly fund updates. You can also see the daily holdings of the funds here.

Stocks

The SPDR S&P 500 ETF (SPY), which tracks the performance of the S&P 500, finished the week above both its 50-day and 200-day moving averages.

Stocks remain relatively close to the all-time highs set in mid-August. Strong corporate earnings, including contributions from technology and semiconductor companies benefiting from AI-related investment, have helped support the market despite continued geopolitical tensions in the Middle East.

Investors continue to focus on whether AI-related investment can translate into sustained productivity and earnings growth. The upcoming midterm elections could also affect the market outlook by changing the balance of power in Congress and influencing future legislative priorities.

Bonds

The iShares 7-10 Year Treasury Bond ETF (IEF), which tracks intermediate-term Treasurys, finished last week below both its 50-day and 200-day moving averages.

Bonds remained under pressure as oil prices rose and inflation concerns persisted. Higher energy costs can feed into inflation, reducing the purchasing power of a bond’s fixed interest payments and potentially leading investors to demand higher yields. The recent rise in bond yields put the 10-year Treasury yield at its highest level since July 2007, the last time the yield was above 5.00%.

The Federal Open Market Committee raised the federal funds target range by 25 basis points last week, to 3.75%–4.00%, in a unanimous decision. It was the Fed’s first rate increase in about three years.  Markets were also pricing in the possibility of another increase at the Fed’s October meeting, as shown in the CME FedWatch chart below.

Gold

The SPDR Gold Shares ETF (GLD), which tracks the price of gold, finished the week above its 50-day moving average but below its 200-day moving average.

Flexible Plan Investments (FPI) is the subadviser to the only U.S. gold mutual fund, The Quantified Gold Futures Tracking Fund. Launched in 2013, the fund is designed to track the daily price changes in the precious metal in a more tax-efficient manner than its ETF counterpart, GLD.

FPI’s indicators

The QFC S&P Pattern Recognition strategy’s primary signal started the week 200% net long the S&P 500. Exposure fell to 150% net long on Monday and returned to 200% net long on Tuesday.

Our QFC Political Seasonality Index strategy remained defensive throughout the week. The QFC Political Seasonality Index—with all of the daily signals—is available after login in our Weekly Performance Report section under the Domestic Tactical Equity category.

The Volatility Adjusted NASDAQ strategy began the week 140% net long the NASDAQ 100 and reduced exposure to 120% net long on Friday.

The Systematic Advantage strategy began the week 120% net long the S&P 500 Index. Exposure fell to 90% net long on Wednesday and returned to 120% net long on Friday.

Our QFC Self-Adjusting Trend Following strategy’s primary signal remained 0% net long the NASDAQ 100 throughout the week.

The Volatility Adjusted NASDAQ, Systematic Advantage, QFC Self-Adjusting Trend Following, and QFC S&P Pattern Recognition strategies can all employ leverage, so the investment positions may at times exceed 100%.

Our Classic model remained in stocks throughout last week. Most of our Classic accounts follow a signal that will allow the strategy to change exposure in as little as a week. A few accounts are on platforms that are more restrictive and can take up to one month to generate a new signal.

FPI’s Growth and Inflation measure is one of our Market Regime Indicators. It shows that we are in a Normal economic environment stage (meaning a positive monthly change in prices and a positive monthly change in GDP). Historically, a Normal environment has occurred 75% of the time since 2003 and has been a positive regime state for stocks, bonds, and gold. Stocks have the highest rate of return in Normal periods. Gold has the second-highest return but has also experienced high drawdowns in these environments.

Our S&P volatility regime is registering a Low and Falling reading, which favors stocks over gold and then bonds from an annualized return standpoint. The combination has occurred 32% of the time since 2003.